Japanese stocks rose for a third day, sending the Nikkei 225 Stock Average to its biggest gain in almost a month, as declining oil prices eased concern about energy costs and reports showed the economy is improving. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, climbed 3.3 percent. Shinsei Bank Ltd. surged 7.7 percent after the lender partly owned by J. Christopher Flowers had its rating increased at Credit Suisse Group AG. Dentsu Inc., Japan’s largest advertising company, leapt 4.9 percent after Facebook Inc. hired it as a sales and marketing representative. The Nikkei rose 1.2 percent to 10,754.03 at the close in Tokyo, the biggest advance since Feb. 2. The broader Topix index gained 1.3 percent to 963.70, after declining 3.3 percent last week on concern unrest in Libya would drive up oil prices. All the 33 industry groups in the Topix advanced. “Anxiety about Libya increased last week, but the market has calmed for now because it doesn’t seem likely to spread,” said Junichi Misawa, head of equity investment at Tokyo-based STB Asset Management Co., which oversees about $14 billion. “If you look past special factors like the situation in Libya, overall the global economy is improving.” The Topix increased 5.8 percent through yesterday in 2011, the most among the major Asia-Pacific benchmark indexes. Stocks in the Japanese benchmark are valued at 16 times estimated earnings on average, compared with 13.8 times for the S&P 500 and 11.4 times for the Stoxx Europe 600 Index. Futures on the Standard & Poor’s 500 Index gained 0.3 percent today. The index advanced 0.6 percent in New York yesterday after reports showed personal income improved more than economists expected and a measure of U.S. business conditions rose to its highest level in more than 22 years. Higher U.S. Incomes In the U.S., incomes climbed 1 percent in January, exceeding the median forecast of economists surveyed and the most since May 2009, the U.S. Commerce Department said yesterday. The Institute for Supply Management-Chicago Inc. said yesterday its business barometer rose to 71.2 in February, the highest level since July 1988, from 68.8 in January. Figures greater than 50 signal expansion. The gauge, which was projected to fall, exceeded every estimate of economists surveyed by Bloomberg News. Employment Improves In Japan, the number of people with jobs increased by 170,000 in January from a month earlier while those outside the workforce decreased 0.4 percent, seasonally adjusted figures from Japan’s statistics bureau showed. A separate report today showed that the job-to-applicant ratio rose, indicating that more jobs are becoming available. There were 61 positions for every 100 candidates in January, compared with a revised 58 positions in December, the Labor Ministry said. Crude oil for April delivery declined 0.9 percent to settle at $96.97 a barrel in New York yesterday, the biggest daily drop since Feb. 11, after Saudi Arabian Oil Co. Chief Executive Officer Khalid Al-Falih said the kingdom is ready to cover any supply shortfall from unrest in Libya. Rebels calling for the ouster of leader Muammar Qaddafi yesterday gained fresh support as the European Union imposed an arms embargo and other sanctions and the U.S. said it has frozen $30 billion in Libyan assets. Opposition forces control much of Libya’s east and are encroaching on Qaddafi’s stronghold in the capital, according to the Associated Press. “Although there’s still uncertainty about what’s happening in North Africa and the Middle East, easing crude futures are supportive” for the stock market, said Fumiyuki Nakanishi a strategist at Tokyo-based SMBC Friend Securities Co. “The data continues to show the economy is steadily improving.” Banks Advance Banks were the biggest support for the Topix. Mitsubishi UFJ Financial Group climbed 3.3 percent to 468 yen, while Sumitomo Mitsui Financial Group Inc., Japan’s second-largest lender, gained 3.2 percent to 3,185 yen. Shinsei Bank surged 7.7 percent to 112 yen, gaining the most on the Nikkei, after Credit Suisse Group raised its rating on the company to “outperform” from “neutral.” The brokerage’s upgrade followed the lender’s announcement yesterday it plans to raise as much as 69.4 billion yen ($847 million) in a share sale to meet new capital requirements and strengthen its balance sheet. “Risk factors related to capital adequacy should decline sharply following the capital increase,” Shinichi Ina, an analyst at Credit Suisse, wrote in a report yesterday. He also raised his 12-month target share price to 126 yen from 97 yen. Dentsu leapt 4.9 percent to 2,723 yen, the highest close since January 2008. Dentsu will have exclusive rights to sell space on Facebook’s premium ad service for one year, the company said in a statement. Mitsubishi Heavy Industries Ltd. climbed 4.6 percent to 363 yen, rising the most since December 2009, after the Nikkei newspaper reported the equipment maker won a 20 billion yen order supplying tankers to Nippon Yusen K.K. It was the first order of its kind for the company in about four years, according to the report. To contact the reporter on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net. To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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